The Oregon Translational Research and Development Institute, a state-funded effort to commercialize bioscience, plans to open the state’s first biotech incubator in Portland’s South Waterfront District.

Roughly $1 million in state money will fund the incubator.

Supporters say the incubator, which will open this spring, could launch dozens of companies that generate hundreds of millions of dollars in annual revenue and employ hundreds of workers.

The Oregon Bioscience Incubator will initially include up to six bioscience companies.

Among the first tenants: the Oregon Health & Science University-spawned drug company 13therapeutics, which has so far raised $7 million in start-up and venture capital funds.

Jennifer Fox, OTRADI’s interim director, said the incubator could attract investors who tend to bypass Portland biotech startups in favor of Seattle and Silicon Valley-based companies.

“It could make it easier for venture capitalists who want to visit more than one company at a time,” Fox said. “Incubators offer one-stop shopping. And when more companies receive funding here, it’s more likely that they’ll stay and expand here.”

About 50 percent of the Oregon Bioscience Incubator’s 13,000 square feet has already been leased.

Fox said OTRADI could eventually expand into other parts of the Willamette Wharf building, which will host the facility. The incubator will initially occupy about 27 percent of the Southwest Macadam Avenue Wharf structure.

The incubator will include six “wet labs,” or large research areas that include plumbing fixtures. It will also provide startups with offices, conference rooms and shared equipment facilities.

State funds will cover the initial $1 million build-out costs. The money comes from 2011 funds provided through the Oregon Innovation Council. Oregon Inc., the state-led effort to back startups and commercialize the public university research, has allotted some $10 million to OTRADI since 2007.

The project, which is expected to open in 2013’s second quarter, could extend the Oregon biotech industry’s recent upswing. The industry continues to grow locally, with bioscience employment increasing by nearly 31 percent over the last decade. As of 2010, Oregon's bioscience industry contributed $7.1 billion to the economy.

OHSU, Portland State University and other public universities are increasingly commercializing research, a process known as “tech transfer.”

OHSU reported last week that it reached record tech transfer figures in such areas as procuring patents and private research funds.

Portland’s biotech incubator could also launch similar efforts in Eugene and elsewhere throughout the state.

It will also cement the South Waterfront district’s role as Portland’s research hub. The bioscience incubator will sit about a half-mile south of OHSU’s Center for Health and Healing, the South Waterfront’s aerial tram station.

The bioscience space will offer between two and three times as much space as the Portland State University Business Accelerator. The Accelerator accommodates far more companies, 30 in all, than the new incubator will. Biotech companies tend to require sprawling spaces because their labs contain large pieces of equipment.

“We do have nine bioscience companies at the Accelerator, and they need a place to grow up and out to,” said Angela Jackson, the Accelerator’s manager. “There’s a hole in the landscape, and we’re glad there’s someone there to fill it.” In the case of 13therapeutics, the company will continue developing its anti-inflammatory peptides that treat such conditions as Crohn’s disease and arthritis.

“The incubator will provide a rich environment for creating critical mass that’s necessary for new companies,” said Tom Bruggere, the company’s CEO. “In Oregon, biotech is a fledgling industry. A lot of shared experiences can happen here that can help everybody.”

OTRADI, which is a nonprofit, plans to move its own operations from PSU’s downtown campus to the Macadam space. Fox and other OTRADI staffers and officers will help startups navigate grant compliance rules and other legal issues so the companies can focus on product development.

The group will also link pre-revenue businesses to venture capitalists and other funding sources.

By some estimates, it costs $1 billion to get a biotech product to market over 10 years. Lab spaces cost about $500 per square foot.

A Bend-based Amplion Research study released this month found that the Food and Drug Administration has approved fewer biomarker-based tests this year than it did in 2007. Those tests help determine whether patients can take certain medicines or undergo certain treatments.

However, John Audette, Amplion’s president, said the research indicates that states should spend more, not less, to develop the biotech industry.

“An incubator would only encourage research by governmental entities and private companies,” Audette said. “We believe that would help the FDA get up to speed on their approval process.”

Area tech transfer supporters added that the incubator will make it easier for them to launch new companies. Such businesses could include the four that PSU expects to launch over the next two years.

“Remarkably, for a place that doesn’t have a medical school, we have a lot of companies that are centered on medical devices and pharmaceuticals,” said Joe Janda, director of PSU’s innovation and intellectual property division. “Those companies need spaces exactly like the one that OTRADI is putting together.”

Fast Fact

The Oregon Translational Research and Development Institute hopes to generate enough revenue within five years to become self-sustaining.